For a firm in a perfectly competitive market, if it is producing at a level of output where marginal costs are equal to marginal revenue it:
A. should cut back production to increase profits.
B. should increase production to increase profits.
C. is producing a profit-maximizing quantity.
D. is impossible to tell how quantity should be changed without more information.
C. is producing a profit-maximizing quantity.
You might also like to view...
Refer to Table 17-1. Suppose the output price is $3. If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire?
A) 7 units B) 5 units C) 4 units D) 3 units
When we say the cost of living has gone down, we mean that, looking broadly over a range of goods and services:
A. a dollar buys less today than it used to buy. B. a dollar buys more today than it used to buy. C. a dollar buys the same today as it used to buy. D. our income has increased to match the cost of those goods.
Millionaires tend to be older than the general population because
a. older workers generally have more education than younger workers. b. many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. c. the earnings of most people peak during the retirement phase of life. d. older people have less to do, and therefore, they have more time to come up with innovative ideas.
A monopoly will maximize profits at the level of output at which
A) MR = MC. B) MR = AFC. C) MC = ATC. D) MC = P.